Kinghorn v HKAC Asset Management Services

Kinghorn v HKAC Asset Management Services - [2010] NSWDC 232 - NSWDC 2010 case summary — Zoe

[19]

24 The defendants obtained a permanent stay proceedings. The plaintiff appealed to the Full Court. Kaye and Beach JJ discussed the scope of actionable malicious prosecution and concluded: "In our opinion, there is no longer justification for confining to a bankruptcy petition and an application to wind up a company the remedy for malicious prosecution of civil proceedings where the damages claimed is to the plaintiff's reputation. The issue of a summons to enjoin a solicitor from practising without a practising certificate might not be expected in all cases to attract publicity by the media. Nevertheless evidence might establish that the service of the summons upon the appellant was an event which became know within Melbourne legal circles. Evidence might further establish that the order of the court restraining the appellant from acting as a solicitor received publicity by the media or professional journals, or became known to members of the legal profession by other means. Similarly, by the evidence it might be established whether the committal order received publicity, so that both members of the legal profession and the appellant's clients became aware of the term of imprisonment to which he was sentenced." 25 Ormiston J, after carrying out a historical survey of the decisions and the law and procedure behind them, concluded at page 289: "For the reasons which I have endeavoured to explain I have concluded that the policy of the law no longer would deny a party the right to assert that he has suffered damage to his reputation by reason of the wrongful and malicious institution of civil proceedings. Conscious as I am that the result of this appeal will be to deny defendants to actions for malicious use of civil process the right to have the action struck out or stayed for want of provable damages, the risk that maliciously made allegations in civil proceedings may cause perceptible harm to a person's reputation is now a real risk under current law and procedures which is evidenced in practice by a reading of the daily newspapers, to say nothing of other sources of "news"." 26 The defendants submitted that the claim for malicious prosecution should be dismissed or struck out for the following reasons: (i) the tort of malicious prosecution is not available in civil proceedings except in certain limited and recognised exceptions. The plaintiff's case falls outside those limited exceptions; and (ii) if the tort of malicious prosecution is available in civil proceedings it is not available in proceedings where there is no penalty, pecuniary or otherwise and a claim without even the potential for a disciplinary or punitive element. 27 The defendant points to the fact that there is no Australian case in which a claim of the kind advanced in the present case has proceeded to trial let alone succeeded. The plaintiff, on the other hand, submitted that the categories of the tort of malicious prosecution are not closed and that he should not be precluded at an interlocutory stage from arguing that his claim falls within the scope of the tort of malicious prosecution. The plaintiff says that there is no authority which precludes the expansion of the tort to cover a case such as the present.

[33]

41 The particulars provided as to the motivation of the defendants in the Federal Court proceedings are as follows: "As for the particulars in relation to the facts, matters and circumstances relied upon to support the allegation that the fabrications were "motivated by desire to defame and injure the plaintiff and cause him nuisance in business", those facts, matters and circumstances are: During 2009, Mr Kinghorn was part of a bidding party for the purchase of the aviation business from the Receivers of the Allco Group of companies; It was within the knowledge of the Receivers that Mr Kinghorn's father, John Kinghorn, was also part of that bidding party, and was a financial backer of that bidding party; The orders by AAFL in the Federal Court Proceedings against Mr Kinghorn extended to an injunction to restrain Mr Kinghorn from undertaking business with his father; Furthermore, part of the sale by the Receivers involved the assignment of certain preference shares in companies of which Mr Kinghorn was a director and ordinary shareholder; The assignment of those preference shares required the consent of the companies in which the preference shares had been issued; At the date of the Federal Court Proceedings were instituted against Mr Kinghorn, the sale of the aviation business to interests associated with HKAC Asset Management Services (AAFL) Pty Limited had not concluded, and the institution of the Federal Court Proceedings against Mr Kinghorn personally by AAFL (at the time in the control of the Receivers) was therefore motivated by desire to effect Mr Kinghorn's bid, to effect Mr Kinghorn's decision regarding the consent to any assignment of the preference shares to any potential purchaser of the aviation business, and to defame and injure Mr Kinghorn and cause him nuisance in business." 42 The case disclosed by the pleadings and the particulars is that the Federal Court proceedings were commenced based on fabricated allegations and following legal advice which did, or should have, made it clear that the proceedings were baseless. The proceedings were commenced for a purpose outside the scope of the proceedings, namely, a desire to affect the plaintiff's bid, to affect his decision regarding his consent to any assignment of preference shares to any potential purchaser of the aviation business and to defame and injure him and cause him nuisance in business. It is alleged the second defendant published the false allegations to attract publicity adverse to the interests of the plaintiff and when subsequently ordered by the Federal Court to file a statement of claim setting out the precise allegations, the response of the second defendant was to file a notice of discontinuance.

Parties

Applicant/Plaintiff:

Kinghorn

Respondent/Defendant:

HKAC Asset Management Services

Legislation Cited (1)

Corporations Act 2001(Cth)

Cases Cited (24)

CITATION: Kinghorn v HKAC Asset Management Services (AFFL) Pty Ltd [2010] NSWDC 232

A v New South Wales [2007] HCA 10, (2007) 230 CLR 500 Australian Securities and Investments Commission v Neolido Holdings Pty Ltd [2006] QCA 266 Chapel Road Pty Limited v ASIC [2006] NSWSC 1014 Dey v Victorian Railway Commissioners (1949) 78 CLR 62 Edenden v Bignell [2007] NSWSC 1122 Fodare Pty Ltd v Shearn [2010] NSWSC 737 Foyster v Foyster Holdings Pty Ltd [2002] NSWSC 768 Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2007] FCA 1621 General Steel Industries Incorporated v Commissioner for Railways (NSW) [1964] HCA 69 Gregory v Portsmouth City Council [2000] 1 AC 419 Jervois Sulphates (NT) Ltd v Petrocarb Explorations NL [1974] 5 ALR CASES CITED: Kable v State of New South Wales [2010] NSWSC 811 Litmus Australia Pty Ltd v Canty [2007] NSWSC 670; (2007) 25 ACLC 1141 Little v Law Institute of Victoria [1990] VR 257 Martin v. Watson [1996] A.C. 74, 80 Noyce v Robbins [2007] WASC 98 One.Tel Ltd v Rich [2005] NSWSC 226; (2005) 190 FLR 443 Primacy Underwriting Agency Pty Ltd v Kilborn [2007] NSWSC 158; (2007) 25 ACLC 160 Savile v. Roberts (1698) 12 Mod. Rep. 208 Scott Darren Pascoe in his capacity as liquidator of Charter Workforce Pty Ltd (IN LIq) v Divisional Security Group Pty Ltd [2007] NSWSC 211 Supercar International Holdings Ltd v Sommers [2009] NSWSC 1488 The Beach Club Port Douglas v Page [2005] QCA 475 Varawa v Howard Smith Co Ltd (1911) 13 CLR 35 Williams v Spautz (1992) 174 CLR 509

[2006] QCA 266

[2007] WASC 98

[2005] QCA 475

(2007) 230 CLR 500

(1949) 78 CLR 62

(2005) 190 FLR 443

(1911) 13 CLR 35

(1992) 174 CLR 509

(1964) 112 CLR 125

(1974) 5 ALR 1

[2006] NSWSC 1014

[2007] NSWSC 1122